News from "The Voice of Missouri Business"®

Without Missouri Senate action, minimum wage is going to $10 per hour right away – $11 per hour in January

Associated Industries of Missouri (AIM) joined several other business groups in filing suit against an ordinance passed by the City of St. Louis that would have increased the minimum wage that must be paid by employers located in St. Louis City. Although we prevailed at the lower court level, the Missouri Supreme Court invalidated a statute preventing local governments from enacting local minimum wages that had been on the books for nearly 20 years and, in effect, validated the St. Louis City ordinance. Yesterday, the Missouri Supreme Court overruled our motion for rehearing.

The City of St. Louis released a statement that minimum wage will increase as soon as the Circuit Court lifts its injunction, which could happen as soon as next week. It will be effective immediately thereafter, according to this press release by the City of St. Louis.

While the Missouri House took quick action to pass a bill a month ago that would have averted this crisis, the Missouri Senate has not passed the bill. Unless the Missouri Senate passes HB 1194 and 1193in the next few days and that measure is signed into law by Governor Eric Greitens, employers in the City of St. Louis will pay the price through increased wages, or low-income workers will lose their jobs, because of the City’s ordinance to increase the minimum wage to $10 per hour. It will get worse in January when the minimum wage rises to $11 per hour.

“This decision by St. Louis City leaders, and now the Missouri Supreme Court, will lead to job losses for many minimum wage workers in the City of St. Louis,” said Ray McCarty, president and CEO of Associated Industries of Missouri. “The notion that money grows on trees and employers will just pay workers more without impacting other parts of their business is simply ridiculous.”

If employers must pay higher wages to some, they must raise prices, lower other costs, or reduce the total number of minimum wage workers. Also, a cascade effect will happen as workers that are currently paid above minimum wage expect higher wages as the minimum wage increases. The higher local minimum wage, combined with the earnings tax imposed in the City of St. Louis, will encourage more businesses to locate outside the City, making it more difficult to attract and retain employees in businesses in St. Louis City.

“The City has traded short-term gain for some workers for longer term job loss for some of the very workers they have sought to help,” said McCarty. “The Missouri Senate may still enact a bill to prevent this action and we hope they are able to pass HB 1194 and 1193,” said McCarty.